Which of the Following Shocks Is Most Likely to Cause

question 73

Multiple Choice

Which of the following shocks is most likely to cause an expansion?

• A) Defense spending falls
• B) Defense spending rises
• C) Defense spending rises and then falls
• D) Oil prices surge upward
• E) Oil prices rise slowly

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Definitions:

FASB

The Financial Accounting Standards Board, the organization responsible for establishing and improving financial accounting standards in the United States.

Present Value Approach

A method to determine the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Installment Sales Method

An accounting method that recognizes revenue when payments are actually received rather than at the point of sale.

Accrual Method

A bookkeeping approach that registers revenues and costs as they are accrued or realized, irrespective of the timing of the associated cash transactions.